The Bailout will not be Successful

The Treasury's latest plan (following the recent British action) of taking equity positions in commercial banks is yet another attempt to avoid dealing with the central problem that precipitated the crisis.

The plan is unlikely to be successful in injecting new equity into the markets and freeing up funds for lending. Like our $600 stimulus checks, the new funds will go to paying off old debts rather than resulting in new lending.

Furthermore with the government taking equity positions in the banks, the equity of current shareholders will be diluted. This will contribute to the stock market's downward spiral.

The solution to the crisis is to make the mortgages whole.

Sent to the New York Times

Op-Ed: Critique of the Treasury Decision Process to Decide the Bailout (Cambridge Chronicle)

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The fragility of the global nuclear order

I am horrified that Graham Allison, a Harvard Professor/Administrator, and Ernestino Zedilo, an IAEA Commissioner, managed to write a column about the Fragility of the Global Nuclear Order (Boston Globe, September 30, 2008: A11) without once mentioning the forthcoming treaty on nuclear cooperation between the US and India.

This horrendous treaty gives India a pass on the requirements of the nuclear non-proliferation treaty. They will receive nuclear assistance from the United States without having to comply. Today, your sister newspaper, the New York Times (A bad India Deal, September 30, 2008: A30) editorialized that passage of the treaty "would make it even harder to rein in Iran's (and other's) nuclear ambitions."

Your authors did your readers a disservice by failing to point out that with this treaty, the United States is contributing to the fragility of the nuclear world order.

Sent to Boston Globe

McCain on Regulation

We need effective regulation in our financial markets (Shocked, shocked by greed. Boston Globe, September 18, 2007: A10).

John McCain is not the candidate of financial regulation. John McCain never came across a regulation that he liked, except one: the regulation restricting a woman's choice to have an abortion.

Sent to Boston Globe

Kerry's Tin Tongue

John Kerry really does have a tin tongue. He characterized thirty one percent of the Democratic voters who voted for his opponent as "mischief makers" (Kerry wins primary decisively, Boston Globe, September 17, 2008: B1, B5).

He is right that we will rally around him in the November election. There is no way we can risk losing a veto-proof majority in the Senate to support the next Democratic president. So Kerry despite his arrogance will return to the Senate.


Sent to Boston Globe

Too Big to Fail

The takeover by Bank of America of Merrill Lynch may be the best short term solution (Lehman files for bankruptcy; Merrill is sold, New York Times, September 15, 2008: A1).

In the long term it is unlikely that the cultures of two so very different organizations can be melded into a coherent whole. Even if they are successful, aren't we just building a company that, when the next financial crisis hits, will be "too large to fail."

Sent to New York Times

Break in tolls on Pike may go

It really is time that the Commonwealth bit the bullet on the turnpike issue (Break in tolls on Pike may go, Boston Globe, August 22: A1, A8. Fiddling about with toll discounts will not bring us a 21st century way of paying for the highway system.

It is very clear that the state roads should be run on an integrated basis. So that having two government departments -- or quasi-government departments -- run the Turnpike and the Highway System makes no sense at all. Once it might have for financial reasons but it does not in these days of difficult financial times. It will of course be difficult to effect a merger between these agencies but the transition might be eased if we took a first step by abolishing tolls on the turnpike.

All of us benefit from the turnpike every day of our lives. The food we eat, the consumer products we buy all reach the cities and towns of the state via the turnpike. Those of us who live closer to it may benefit a little more through reduced congestion when other users travel the turnpike rather than local roads. Those of us who use the turnpike benefit most of all, but we do not benefit more than those who use Interstate 95 and pay no tolls at all.

It is therefore clear, that the turnpike tolls are an additional tax imposed on those who drive on the turnpike; logic -- as opposed to politics -- tells us that, as we all benefit from the turnpike then we should all pay for it.

Last year, the gas tax at 23.5 cents per gallon raised about $600 million. Raising the tax to 50 cents per gallon would raise about $1.26 billion or an additional $626 million. While, if oil prices stay constant, the price would increase to about to about $4.00 per gallon.

The increased revenue would greatly surpass the $18 million to be gained from playing with the discounts by discontinuing them and would even cover all the turnpike revenue from tolls (about $250 million as of December 2006) several times over.

This would leave $330 million to be allocated to the road and bridge repairs that we desperately need or to pay down the debt. The Governor has made some tough decisions in the past few weeks. I hope he will make the changes necessary to repair our broken highway system.

Sent to Boston Globe